Real Estate is Still a Good Investment – REALLY!!

I feel that real estate has & will always be a good investment. Historically, this has pretty much always held to be true. Granted, there are many out there & especially some who were trying to be investors and bought at the wrong time, to say the least, that might feel differently.

I think for the majority of us, our real estate purchases have done very well for us. Especially, in the past several years where we have seen so many either refinancing and cashing out or taking home-equity loans on their property. But now that the market is changing we are hearing a lot of grumbling. I think a lot of people are getting very scared.

Too many have been relying on their property’s wealth. Take this for example, in Florida 16% of new car purchasing in 2006 was paid with home equity loans. That is astounding. Mind you, California was at 30% while the national average is 7%.

Wages have not appeared to have kept pace with inflation. With the increased wealth in our homes & relatively low interest rates, etc; people were making up for this shortfall by refinancing their homes & taking cash out. Now with housing slowdown, taking equity out of your home is not as readily available.

But, Real Estate will still remain to be a great investment in the long-term. It that is what has to be remembered. Yes, some have done great in the short term, but real estate has pretty much always been a long-term investment.

Thank goodness we are in a great industry!

Until next time – Marc It Sold!

Home Prices Plunge - Stop the Hysteria!!

Today, the front page headline in the Orlando Sentinel is “Seller Beware: Home Prices Plunge.” We are seeing & hearing this from all types of media. The writer was discussing the Median Sales Price. The unfortunate problem is that many may be unfamiliar with the term and at the same time it is being used as an incorrect standard.

Let’s start with some clarification here. The Average Price is that of homes in any given period being determined by taking all of the prices of homes that have sold, adding them together & then dividing by the number of homes that have sold. The Median Price is the home that has sold basically in the middle. That means that 50% of the homes, during that period, have sold for more & also the other half sold for less than that price.

Therefore, when we discuss median price, we are saying what is selling at that point in time. This does not mean that house values have dropped. But in conjunction with the average price is a good indicator of what homes are presently selling.

Now, granted & I’ve discussed this before, the real estate climate is different all of the country & everything is relative. Here in Orlando we still have a healthy market. Yes, the number of sold homes is less than what we saw in the past few years, but we are still selling homes. With the record number of recorded sales in the past couple of years, it was inevitable that this should slow down to a normal pace.

OK, I know that the world ‘normal’ is used a lot & myself included, but there is in reality no such thing as a ‘normal market.’ The market, as is discussed in Economics 101, boils down to supply & demand – buyers & sellers. We have an oversupply of homes on the market. In Orlando, we’ve hit the highest level recorded – over a 14 months supply.

I track the inventory numbers weekly. I do this for personal knowledge of what is happening in my market. You need to know your market. Last week, the amount of inventory dropped from the previous week and I thought & was also hoping that this was an indicator of a shift in the market. Unfortunately, this week the numbers were even higher.

But, HOMES ARE SELLING! I will reiterate this & it has been my mantra, but you have to show PRICE & VALUE for a home to sell. And as a realtor®, as the professional, you need to service your clients. You need to be realistic as do they. You need to do the proper marketing for a home to sell. Homes are generally not going to sell themselves as they did in the past.

I think that I have an excellent marketing plan. I also have to assume that my clients feel so also. The reason that I mention this is because I consistently see other listings & have to wonder what do they expect to sell. There is either nothing really mentioned about the home in the marketing comments & I’m just reading facts in regard to size, # of bedrooms & baths; the pictures are usually terrible or non-existent; and, no virtual tour! How can you expect to sell a home like this?

I always try to find new avenues to market a home; and, yes, myself. Your listing and you have to be as professional as is possible for you. This is a career & a profession & you need to sell yourself as well as your product. Otherwise, your product will languish on the market. And, that serves no one’s purpose.

OK, so I got off on a tangent – Imagine that!! I’ve stated in my last blog that I was thinking of writing about ‘What is a Realtor®?’ I will do that soon, because there is a great misconception of what it takes to be a realtor® & what a realtor® does. It’s all about education. As a person and realtor®, I believe in further educating myself, but I also feel that it is just important that I educate the public. Without this is why we have so many misconceptions flying around.

Thanks again for the indulgence.

Till next time – MARC IT SOLD!

ps. Thank you Nury!

BEWARE – Deed Scam

Recently, I received a letter in the mail. I was pretty sure it was junk mail immediately, but opened this one up. Inside, I was told that I needed a Certified Deed for my home. I knew right away that this was bs, but had to read on out of curiosity. I was being asked to spend an amount, which I can’t remember. I’m pretty sure that the amount was enough for some unsuspecting people to think that this was legitimate need, yet not too much for them to question the validity. The letter went on to say that you need this to protect your interest in your home, etc.

This is a waste of money. When you purchased your home, you received a Deed and this was recorded in the county in which your home is located. You would have received back from either the closing agent or title company this recorded deed, which you should have placed in a very safe place & hopefully a bank vault. Even if you can’t find this document, it is easy enough to contact your local Official Records office & get a certified copy for just a few dollars.

I feel bad because I know that there are a number of unsuspecting people out there that will get sucked into this scam. I know this is not a scam in that it is harmful to people, but it is a scam nevertheless and should be treated as such.

Until next time – Marc It Sold!

Can YOU quantify success?

This blog was originally going to be about ‘What is a Realtor®?’ with this as a second part, but I realize that it would just be too long.

I try to keep upbeat & you have to in this industry otherwise you’ll just sink, but sometimes you just find yourself at a loss.

Take me for instance, many would consider me successful. But what is successful to one person may not be to another. Some may quantify in monetary terms (granted, that doesn’t hurt). Others may in the amount of closings you’ve had. Some may feel it is what you give to others. And then again there is the quality of life that you lead.

I think that it is all of these & more. I’ve been in the business for a number of years. Yes, I do consider myself somewhat successful. I’ve been busy, thank goodness, while others have complained and languished. Last year was probably one of my best years & this year appears to meet if not exceed that.

Let me backtrack for a moment, I am not a boastful person, even though this may appear differently.

So how do you measure success? I was at a loss this morning. Granted, this could partially be due to the fact that the holidays are here. But, I have to wonder. I have some great marketing pieces that I’ve produced. Friends have told me that they don’t know anyone who works as hard as I do. I don’t feel that it is hard work, because what I do is a joy. I really do get a lot of pleasure out of being a realtor®. This isn’t a bunch of bs. I don’t have time for bs & I’m sure as heck not going to try to sell it to you, the reader.

But, there are times, it is like what’s the next step? What can I do to promote more business? What can I do to get that home sold? And, I’m sorry, but I just feel at a loss. And this is when I have to question, am I really successful? Granted, when I do feel like this I just trudge into getting some work done and that does help. I also try to go out and walk/run. Another great help. In fact, that is where I came up with the idea for this blog.

I’m not usually one to put myself out there so to speak. But, on the other hand, I’ve also never denied what I am. I’ve allowed my life to be an open book. I have nothing to hide.

I tell people that are thinking about getting into our industry that you have to have a ‘thick’ skin. We all know that there is quite of bit of rejection in this business. I also tell people that you need at least six months plus living expenses.

I see quite a few people leaving this business now. Many, of course, came in past several years when the industry was riding on a high. And, now that we are settled into a normal business cycle, they are having issues and do not know how to respond. I’m very lucky that I know what a ‘normal’ real estate market is.

As a realtor®, it is too easy to get down in the dumps. We’ve all been there at least one time or another. And for some this is an ongoing situation. But to deal in this business, you have to pick yourself up. You have to remember that whatever you are feeling, you are projecting it onto others around you. People can sense a lot more than you may think. This is whether you are in person or on the phone. What do you think it is said that before you pick up that phone to put a smile on your face. It works. I know this for a fact, I am very good at converting.

I’m also very good at picking myself up, but yet there are times… Yes, I know that we are only human, but… I take my business personally. I know that there are many that do not, but this is just the type of person that I am. I’ve been very lucky lately in that my last two listings have sold within 45 days each. This is great in this market and these two listings were priced correctly; they were not low-balled. Yet, I also have a couple of homes that are quite nice & priced very well. Yet I can’t seem to get them to move. I told I have a great marketing plan. I’m all over the internet. Have great flyers & brochures. Virtual Tours. The whole shebang, yet…

Don’t get me wrong, I’m not crying here at all. And, of course, I’ve gotten a little off of track, but you can understand how I question ‘How do you Quantify Success?’

There are all of these coaches out there selling you expensive programs to make you successful. I have not bought into these. I’m sure that some have many good points to show you. But, I firmly believe that to be successful, you have to have it within you. It has to come from within, otherwise all of this reading, coaching, etc. will be for naught. You have to have the will to be successful. You have to have the desire to be successful. You have to want to be successful.

Thanks again for reading my rants.
Until next time – Marc It Sold!™

Where are the Buyers?

I’m sure that many are asking the same question. I continually keep on hearing that the buyers are waiting for the market to settle down. Buyers are waiting for that killer deal. Buyers are waiting....

OK, so we’ve had a reality lesson for sellers. It’s time for a reality check for buyers. In the Central Florida area, as I am sure with many parts of the country, the real estate housing market has settled down. Yes, there is a great deal of inventory out there, but homes are being sold. Granted, not at as fast a clip as the past few years. But let’s get realistic, that was an anomaly. I doubt if we will see anything like that for a very long time to come.

Sellers seem to be somewhat more realistic in that they are pricing their homes accordingly. I don’t know what so many have in their minds that the market still needs to adjust. It did that last year and that was really finalized by the end of the year. Prices aren’t dropping. They shouldn’t. There are some great values out there. You can actually purchase a home now and walk in their with some equity. Not like what we saw in ’05. This is the way a normal market is supposed to operate.

Prices are not going to go down lower & the interest rates have remained quite low also. This is a great time to purchase a home. There is generally price and value built into these homes. If there isn’t, then move on to the next property. There are enough out there to choose from.

I know some are now blaming the sub-prime market, but then again, these are people that are just always looking for something to blame. Yes, the sub-prime market took a hit. Well, heck, they shouldn’t have issued so many risky, really risky loans. But, there is money out there for people with ‘B/C’ credit. It can be found.

Hello folks, the market has bottomed out. It’s as simple as that. It has turned the corner. I’m not just saying this because I would like some buyers. The stats prove this out as do some of the articles finally being put into print.

I just sold a couple of homes within 45 days in this market. No, they were not underpriced. But, we were able to show Price & Value & everyone walked away from the tables feeling like a winner.

Til next time – Marc It Sold!

Why do people think we are Stupid?!?

It's just absolutely amazing to me that people must think we are stupid. Here are two things in particular that I've just come across.

My last post had to do with the Florida property tax issue. This morning I received an email from a realtor in Miami that must be a supporter of Marco Rubio, the House Speaker. Let me just give you a brief history here. He is proposing that we eliminate the property tax on primary residences & reduce the property tax on other properties by 20%. To offset this revenue loss he is wishing to increase the state sales tax by 2.5%. Ok, so here's what their website states, "Lower taxes and lower tax rates on apartment buildings and other businesses will reduce rents and keep rental housing affordable." Who is kidding whom here? Let's say you have a landlord who is receiving X dollars for rent on a unit & the property tax on that unit is reduced. Do you think that this landlord will reduce the rent below the X dollars that are getting now? But yet, there they have it in writing trying to persuade you to their point of view. They will get some people to believe them & I guess that this is enough - that is what they are after.

OK, enough of that one. Here's another I encountered the other day from an insurance agent. I decided to shop around because the insurance on my primary residence just went up way too high and too fast. Again, a brief history, I decided to change agents a couple of years back. The main reason for this is that I needed an Umbrella Policy to better protect my interests & myself. Two years ago, I paid $860 yearly insurance on my primary residence, which was higher than I'd previously paid, but was willing to do so. Last year, this increased to $1030 & this year my renewal came in at $1453. I had one claim back in '08 & the home is just over 10 years old.

So now to the story, I was shopping around and speaking to an agent. She said to me that our rates would not be this high right now if insurers were charging the correct amount all along. She further stated that our insurance rates in Florida have been much too low for too long. OK, so here's my issue with these statements. Insurers have actuaries work for them. These mathematicians create formulas that the insurers use in rating risk. Risk is the underlying factor in insurance. Things are cyclical - whether we are talking about the weather, life, real estate - it really all is very cyclical. So, getting back to insurers, do you think that they are not going to charge us enough to cover their risk? Seriously, now. This is what this woman was telling me.

The insurers ran this garbage back after Andrew in '92 and again after all of the '04 hurricanes. Granted, '04 was an anomaly, but how many years did we go without any severe storms that cost the insurance companies. If you look at their books, you will note that they are still making a profit.

Anyway, enough of my ranting! I just really ticks me off when people think we are stupid. It's fine to get your point across, but be realistic. Don't make it out that we are stupid! That is just such a lack of respect & that is something that I will not deal with. We all deserve respect!

Thanks again for listening to my meanderings.

Until next time - Marc It Sold!

Florida’s Property Tax Fiasco!!

I obviously haven’t written in a couple of months. It is not that I had not wanted, but did not wish to write about the same topic that has been so prevalent, the local market. I was firstly concerned about the negativity that some may derive from this, even though we are in a quite healthy market in Central Florida. I also needed some more inspiration to write.

A client of mine had suggested that I write about the property tax issue that we are experiencing. My first thought & reply was ‘no’. I did not want to write about such a controversial topic. Now, many of you who know me, would be surprised by this response. And you would be rightly so. So, here goes.

I am not aware of what is happening in other parts of the country, but here in Florida we are in the midst of a property tax system that is quite flawed. My concerns are varied, but one major concern is that the politicians will try to do a quick fix & tell us what a wonderful job that they’ve done in saving us money, only to cost us more in the long run down the road.

There is history behind this, which I’ve previously written about. We have in Florida SOH (Save Our Homes), which was passed in 1992. This limited the Taxable Value of your home to a 3% increase, if such is your primary residence. The purpose of this tax measure was to help the elderly from being taxed out of their homes. Unfortunately, even though this may have helped accomplish that task, it more benefited the well to do with expensive mansions, etc. They received a larger benefit.

Now, many proposals are being pandered about to supposedly fix our flawed property tax system. But to fix a flawed system with an equally flawed system is ludicrous.

One of the main proposals is to eliminate our property tax (on your primary residence) and have this replaced with a higher State Sales Tax. While some may feel that this is fair, it really isn’t. Again, the people that will benefit the most as those that have. The people with the mansions (big expensive homes or whatever you wish to call them) will benefit the most. The people that don’t have, those in the lower income brackets, will end up paying more via a higher sales tax and if will affect their pocketbook more.

Not only that, but this is just as inequitable to the renters. They too will be paying a higher sales tax and they are not even property owners. Some may jump the gun and say well everyone should have a larger share in paying for governmental services. But you have to remember that the owner of that apartment complex is already paying property taxes, they would not be exempt if there were a repeal of the property tax laws for primary residences.

It’s also been talked about that a Florida resident should be able to take their current SOH with them when they move; and, generally to a more expensive home. This would only worsen an already flawed system.

And doubling the homestead exemption is not really the answer also. The property appraisers are already shoring up their books and the tax rolls for a change. It generally used to be that the ‘Just Market Value’ on the property appraiser’s tax rolls was approximately 80% of the fair market value on the open market. With the increase in home values that we’ve seen over the past several years, this number became a much lower percentage. But if you check out the property ‘Just Market Values’ now (Orange County, in particular), you will see that many are at approximately 89%. So, you can see that the property appraisers are already trying to shore up values depending on what happens in the legislature.

Let me put this in another perspective. I have a friend whose home is on the market. They purchased the home 10 years ago and their property tax for 2006 with the SOH & Homestead Exemption came to $844. A prospective purchaser asked me what their taxes would be & when I figured it out I was totally astonished. Now, let me preface this first in that this is a lovely home, albeit under 1300sf in a middle class neighborhood. For the new buyer, their first year taxes would be almost $3200 and this is with the Homestead Exemption still in place.

You also need to be wary, because according to the property appraiser’s website, the Assessed Value of this home with the SOH went up 15%. What happened to the 3%? Most people wouldn’t even know. They don’t check their tax bills. It is generally escrowed in with your mortgage payments.

Let’s take a couple of steps back for a moment. Let’s say that the property tax on our primary residence is eliminated. What do you think will happen a few years down the road when they realize that there is not enough revenue coming in from the sales tax? I can tell you what I think - lo and behold, we will find ourselves with another property tax. What do you think will stop the legislature in doing that? By that time, we should have another administration in office and the blame will be put on them. Think about it!!

Additionally, there is another aspect to consider. With the elimination of a property tax, there would be a loss of jobs in that there would be less need for the local property appraisers and tax collectors. Now the monies would be going directly to the state and then funneled down to the local counties & municipalities. Granted, I’m sure there is a lot of ‘fat’ at the lower levels of government as there are at the upper levels. Maybe, this might be good in that they would have to trim a lot of that since the monies would now be coming from elsewhere. And maybe there would have to be more accountability. Only time will tell on this issue.

So, this is not an easy fix. But it also cannot be a quick fix. In doing so you will only be replacing one flawed system with another. What purpose does that serve, except for someone in power saying that they did something? Well, whoop de doo! If doing so leaves us in a similar or worse situation down the road, have you really helped anyone? Or are you really only helping your cronies? Beware, there are many lobbyists & PR people out there that will try to sell us a bill of goods. Just be wary! Be very, very wary as Elmer Fudd might say.

Until next time – Marc It Sold!